British prime minister Gordon Brown said today that the UK is "overcoming" the recession and promised the Government will do everything it can to help British businesses take advantage of the "enormous" opportunities of the future.
Brown was speaking as the British government published a "strategic plan" to invest in the UK's economic and industrial future, maintaining that firms can take advantage of major new opportunities as the world economy emerges from recession.
Ministers said they wanted to set out areas where British government action can have most impact, aimed at speeding recovery and building manufacturing and services.
Brown said this included agreements with the banks to lend more to business, cutting red tape in planning, and state investment in transport infrastructure, communications, education and science.
He also said he was looking at the case for establishing a Bank for Industry and Innovation to provide finance for risky start-up businesses.
Speaking at Loughborough University, Brown said: "Britain works best when Britain works together.
"Our industrial policy is about a dialogue with business, leading to a consensus about what we in Britain need to do to face this global future, and then of course a partnership for the future that I believe is to the benefit of all.
"We have difficulties that we are overcoming, but we have also got enormous opportunities and challenges ahead. Working together, we can meet and master every challenge."
Brown said agreements signed with the banks to increase lending to businesses and homeowners over the coming year were "the first of this kind in the world".
The Royal Bank of Scotland had agreed to increase lending by £25bn (€28bn), Lloyds/HBOS by £14bn (€15.7bn) and Northern Rock by £10bn (€11.2bn), he said.
Meanwhile, HSBC had announced a voluntary agreement to boost lending and more banks were expected to do so over the coming days.
Brown said: "For the first time, to get credit moving in this marketplace, we have had to intervene, we have had to take action and make sure that the banks can work in the public interest and I hope with the lending agreements we have signed the flow of capital will start again to business."
The first priority of the British government's industrial strategy was to "get through this downturn", said Brown, adding: "We have got to invest out of this downturn. We can't cut our way out of this downturn. We have got to invest."
The current recession was the first major downturn of the globalised era, but it is still expected that the world economy will double in size, creating massive opportunities for British firms, said Brown.
"In this harshly competitive new economy that is global in scale, with global flows of capital and global sources of goods and services, we will succeed if we can produce for the world as well as for ourselves the high technology, value-added, precision, custom-built goods and services that the whole world will want to buy," he said.
"It will be Britain that will produce for the world or other countries will do so. We have got to look at what our inherent strengths are and build on those strengths to build for the future.
"You can't be protectionist, you can't turn your back on this challenge, you can't got back to the old policy of picking winners and hoping that that will work.
"In this new competitive world, we have got to do everything as a Government in our power to help our businesses and enable businesses to be internationally competitive."
Speaking at the launch of the strategic plan at Loughborough University's Innovation Centre, business secretary Peter Mandelson said key areas identified for immediate action were centred on innovation, skills, finance, infrastructure and trade.
They included making sure high growth, high innovation firms received the financing they needed, more support for exporters and extra help for turning bright ideas into products.
Skills secretary John Denham will add: "To emerge from the recession quickly and strongly we need to maximise the opportunities for the UK economy in areas where we know Government action will have a big effect, like low-carbon technology, manufacturing, construction and healthcare.
"By making key decisions, buying goods and services, Government shapes and creates future markets, new business opportunities and the demand for skilled jobs.
"That is why our new activism will focus our skills system, the knowledge in our universities and the way we support research through our record investment in science to meet the demands and opportunities Government creates when it acts in other areas of the economy."
Asked after today's launch whether he could see any signs of recovery in the British economy, Mr Brown said: "I would say that the Budget on Wednesday will show that we are going to grow our way out of this downturn.
"We are going to invest our way out of this downturn. It's important that we don't make the mistakes of the past."